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Nifty : 19754

Technical Outlook

• The index staged a strong rebound after two days breather as supportive efforts emerged from 20 days EMA. Consequently, daily price action formed a bull candle carrying higher high-low, indicating positive bias.

• We expect prolongation of consolidation in the broader range of 19900-19200 wherein stock specific action would prevail amid progression of earning season. Key point to highlight is that, past eighteen week’s spectacular ~19% up move hauled weekly and monthly stochastic oscillator in overbought conditions, indicating possibility of extended consolidation in the coming weeks. Nevertheless, it is important to note that in a structural bull market secondary correction is a common phenomenon which makes market healthy. Thereby, dips should be utilized as an incremental buying opportunity to ride next leg of up move.

• The broader market endured its record setting spree over eleventh consecutive week and relatively outperformed the benchmark. However, key point to highlight is that, past 4 months 29% rally in Nifty midcap index hauled weekly Stochastic oscillators in overbought condition (placed at 97), indicating possibility of minor profit booking at higher levels can not be ruled out. Thus, focus should be on accumulating quality stocks on dips in a staggered manner

• We believe, any extended correction from hereon would get anchored around key support of 19200 as it is confluence of:

• A) 61.8% retracement of current up move (18645-19991), at 19160

• B) 50 days EMA is placed at 19111

• C) July month’s low is placed at 19234

Nifty Bank: 45651

Technical Outlook

• The price action for the day formed a an inside day candle as prices held Fridays lows and 20 -day rising moving average around 45200 levels . Index sustaining above Fridays high of 45727 would lead to key short term hurdle of 46300 which is last weeks high .

• Going forward we expect index to consolidate its gains, as prices have reached overbought trajectory, with key short term hurdle at 46300 being identical highs of past two weeks

• Key immediate support is placed at 45200 . Only a decisive break below last week lows of 45200 that coincide with 20 -dema, would lead to extended profit taking towards key support of 44500 which is most recent swing low in July 2023

• PSU Banking stocks are undergoing healthy higher base formation and expected to relatively outperform

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